GeoPost/DPD – multi million investments

The French mall service provider La Poste wants to invest up to EUR 1 billion in the global expansion of its parcel subsidiary GeoPost, which operates under the brand name DPD. A competitive global network for international parcel services is to be created by take-overs, joint ventures and cooperations.

The man is forcing the pace. Claude Béglé, CEO of GeoPost International Management & Development GmbH, lists the targets for GeoPost and DPD for 2005 in one quick breath. The most important ones are: to promote strong growth of sales and earnings, the introduction of a new core product for Europe, the expansion of warehouse capacities in the hub and above all the rapid intercontinental enhancement of the DPD network. The bill for the additional expansion in Europe and the remainder of the world could cost as much as EUR 1 billion in the coming years, said the Swiss national at a press conference in Frankfurt am Main (Germany).

Solid base

Successful business developments in GeoPost’s financial year 2004 provide a solid foundation for these high-flying plans. The newly-formed GeoPost International, which is responsible for the parcel market outside France, was able to boost its turnover by 16% to EUR 1.5 billion. Earnings before interest and tax (ebit), which were not revealed in detail, grew by 50%.The entire GeoPost group, including the express company Chronopost, generated a turnover of EUR 2.3 billion and an operating profit of EUR 82 million in 2004.

DPD, in which GeoPost holds an 83% stake, increased its overall volume of shipments by 9.6% to 313 million parcels. Its core market Germany registered a 9.2% growth rate to 244 million parcels. The cross-border parcel traffic in the DPD alliance of forwarders again rose overproportion-ally by 20% to 34.6 million units. This year GeoPost International is targeting a 16% increase in turnover and a 6% rise in the profit margin.

Global DPD network

It will be interesting to see how GeoPost performs on an international scale this year. With strong business in Europe to back it up, the state-owned French mail service provider La Poste now wants to build up its own global network under the umbrella brand name DPD. <>, Béglé announced. The international network will be constructed in a variable manner. According to Béglé, the company’s strategy is aimed at operative partnerships in major markets like those in the USA or Japan, as well as take-overs in growth markets like China, Brazil or South Africa.

In smaller, more difficult markets such as Korea or Thailand for example, GeoPost will search for franchise partners and nominate agents in minor markets. Discussions are already being held in many countries so that agreement closures can be expected in the coming months. Among others, the Russian Armadillo group, which is 50% owned by GeoPost, will become a DPD franchisee in the second half of the year.

<>, a product introduced recently in Germany which provides pan European trucking services with guaranteed conditions, is to be raised to an international core product. Customers are to be offered an extremely reliable world-wide parcel shipping service by air with a transit time of approximately four to five days.

<> Béglé emphasised.

Enhancing the networks

GeoPost, which already cooperates with the US giant FedEx in the express sector, aims to make agreements with several airlines for air transport services. In order to advance its international business, the re-organised DPD (Worldwide) Ltd will concentrate on the construction of its international network.

In Europe, GeoPost wants to invest approximately EUR 130 million into expanding its hub and warehouse capacities in Germany, Great Britain as well as Central and Eastern Europe. Furthermore GeoPost will consider forming partnerships to provide value adding services in the logistics, forwarding air and seafreight sectors at a local level. However Béglé said that no major financial participations were planned in these sectors.